Shares of MARA Holdings declined 3.3% to $7.97 in premarket activity on Monday, following Morgan Stanley's initiation of coverage with an Underweight recommendation. The firm set a price target of $8 per share.
The bearish call from Morgan Stanley highlights ongoing concerns about the fundamental economics of Bitcoin mining. The bank noted the historical return on invested capital in the mining sector has been unattractive, despite some companies exploring hybrid strategies to repurpose infrastructure for other computing workloads like artificial intelligence.
Bitcoin, a key benchmark for miner profitability, fell approximately 3% to trade around $69,000. This downward move pressured stocks tied to the digital asset sector as the broader market anticipated a quiet opening after last week's volatility.
MARA, primarily a Bitcoin miner, has also been expanding its digital infrastructure offerings, including immersion cooling systems for data centers. However, analyst sentiment remains cautious, focusing on risks from potential further declines in Bitcoin's price, rising mining competition, and high energy costs that could pressure margins.
Macroeconomic Data in Focus
Traders are now turning their attention to two critical U.S. economic releases scheduled for this week. The January nonfarm payrolls report is due Wednesday, followed by the Consumer Price Index (CPI) for January on Friday.
These data points are expected to provide fresh signals on the Federal Reserve's interest rate path, with potential ripple effects across risk assets, including cryptocurrencies and related equities. The market's reaction to this macro news will likely influence the near-term trajectory for stocks like MARA.
